Industry Supplement | November 2016
 

Revenue for the freight and logistics industry

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KPMG’s insights on industry ASC 606 implementation. With the new revenue recognition standard effective date approaching, KPMG offers insight on the most significant industry issues.

Applicability

Application of the new revenue standard

  • Company that is in the transportation (freight and logistics) industry
  • Company that is currently assessing the impact of the new requirements of ASC Topic 606
  • Company that is at an advanced stage of its ASC Topic 606 implementation

Effective dates

Mandatory effective dates and early adoption provisions:

Annual periods:

For public business entities and certain not-for-profit entities the effective date for annual periods is the fiscal years beginning after Dec. 15, 2017.

For all other entites the effective date for annual periods is the fiscal years beginning after Dec. 15, 2018.

Interim periods:

For public business entities and certain not-for-profit entities the effective date for interim periods is the fiscal years beginning after Dec. 15, 2017.

For all other entites the effective date for interim periods is the fiscal years beginning after Dec. 15, 2019.

Early adoption:

For public business entities and certain not-for-profit entities the effective date for early adoption is the fiscal years beginning after Dec. 15, 2016.

For all other entites the effective date for early adoption is the fiscal years beginning after Dec. 15, 2016.

Key impacts

  • Potential change to the timing of revenue recognition, specifically for companies that currently recognize revenue when freight is delivered
  • Changes to principal vs. agent guidance may lead to changes in revenue accounting and presentation
  • Most retrospective volume discounts will have similar accounting to today. However, revenue may be deferred for certain discounts on future purchases
  • There will no longer be a choice to expense commissions as incurred if certain criteria are met

Report contents

  • Specific issues for freight and logistics companies
  • Expanded disclosures
  • Effective dates and transition
  • Impact on the organization

 

 

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